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Political turblence could derail cap-and-trade plans

Democratic leaders are trying to hold votes together as they work to quell concerns.

SALEM — For months, lawmakers pushing a major environmental plan that would put a price on carbon emissions, spent a remarkable amount of time crafting policy that has failed to gain traction since 2007.

But as end nears for the legislative session, the policy work is being overtaken by raw politics that dumped the cap-and-trade idea into uncertain waters.

The legislation, which would become only the second economy-wide carbon pricing program in the nation, has been deeply partisan. But it has become clear in recent days that even some Democrats are starting to pull away in the face of a last-minute push by industry to cut into House Bill 2020.

By the end of last week, five Democratic senators were either against the bill or uncommitted. As a caucus of 18, the Democrats can only lose two votes and still pass one of the party's most ambitious proposals. It's long been clear that no Republican would back the proposal.

On Monday, Sen. Michael Dembrow, D-Portland, agreed to minor amendments to placate Monnes Anderson, which might just seal the deal. Dembrow is one of the main architects of the bill and co-chaired the committee that oversaw it.

The bill is going back to the Joint Ways and Means Subcommittee on Natural Resources on Tuesday afternoon. It will likely consider three amendments: the Boeing amendment, one designed to lessen the impact on timber mills and one that would ask the Oregon Supreme Court to review whether proceeds from an increase in natural gas rates have to be dedicated to the Oregon School Fund.

Steiner Hayward and Hass have not publicly opposed the bill, and political insiders feel their district constituents are too liberal for either senator to vote against cap-and-trade. Steiner Hayward declined to comment, and Hass didn't respond to two requests for an interview.

As of Monday evening, business lobbyist Shaun Jillions said there "a number of senators still concerned with the bill for a number of reasons." When asked how many, he said more than two. Jillions has been one of the most active and opposed lobbyists on cap-and-trade. Where other lobbyists have worked to change specific parts of the bill, Jillions has attempted to significantly weakening it overall.

Johnson is actively working against the legislation. Asked to comment, she declined, saying she's a "woman on a mission" as she walked away.

Jillions isn't the only one working to change the bill at the last minute.

Monnes Anderson said once it got out that she was a potential no vote, she was bombarded by lobbying efforts. She has been contacted by executives from energy companies and the governor, she said, to lobby her one way or the other.

"The rumor got out that I was going to be a no, and it's amazing, because people have worked so hard on this bill," Monnes Anderson said, adding it's become a political discussion over a policy one.

"I think those who are opposed to the bill have really gotten together and are going to support one another," she said. "So yes, politics is really involved here."

Carbon pricing has been in the works since 2007, long enough that its one-time champion, former Sen. Chris Edwards, is now a timber lobbyist working against its passage. Democrats have taken a serious run at it each session since 2016, but have failed to pull it off. After the 2018 session, House Speaker Tina Kotek, D-Portland, and Senate President Peter Courtney, D-Salem, co-chaired a joint interim committee solely tasked with designing the program, a rare if not unprecedented move.

Going into 2019, cap-and-trade led the Democrats' agenda alongside education reform. But while the Student Success Act passed a month ago, the environmental legislation has gone through 19 hearings and seen more than 100 amendments proposed. The bill that backers once hoped would be signed into law on Earth Day still remains in committee as the session nears an end.

Over the past couple weeks, a tanking effort by Jillions and a handful of other lobbyists has had surprising success. Jillions got Johnson to submit a 22-page amendment that cut into every aspect of the bill, essentially demolishing it.

Dembrow and the other co-chair, Karin Power, D-Milwaukie, have said they would in no way consider supporting the amendments.

Dembrow acknowledged some Democrats have strayed but "discussions are happening and moving in a positive direction."

The proposal was expected to be on the House floor this week but a crucial vote in the Joint Ways and Means Committee that was supposed to happen last week was delayed.

That is the last committee hurdle before votes in both chambers.

Leading up to that decision, Jillions and his team made the rounds, specifically with moderate Democrats, pitching his amendment as a few "technical fixes."

Legislative bill drafters met with House Democrats last week to go over the amendment in detail, explaining that the changes were expansive.

An analysis by the Oregon Carbon Policy Office found Jillions' amendment "proposes changes in every dimension of the bill."

The bill's current form puts a cap on 52 million metric tons of greenhouse gas emissions, and reduces the cap each year until there is an 80 percent reduction by 2050. It covers polluters across the economy, aside from agriculture and forestry.

Entities polluting at least 25,000 metric tons must pay for all of their pollution by buying allowances from the state. Each allowance would offset a ton of emissions. The amount of allowances available would decline each year to force emitters into more ecofriendly practices.

Jillions' amendments remove a 45 percent emissions reduction goal for 2035. It would change the cap to cover 27 million metric tons of emissions and allot 93 percent of allowances for free to regulated polluters. This would "dramatically" reduce revenue from the allowance auctions, and actually run the program at a deficit three years into its operation, the analysis found.

The amendment would give natural gas marketers free allowances until 2030 and exclude all fuels. "These changes render the program non-viable," the office wrote.

Jillions said his amendments provide a pathway. If he thought he could kill the bill, he would have, he said. But too many lawmakers are uncomfortable with the bill as is. His changes are a common-sense alternative, he maintained.

Backers of the program say the amendments won't survive. Even if they were to get approved at the committee level, such a version couldn't pass the House, according to legislative staffers. Also, Courtney is expected to temporarily replace Johnson as a co-chair of Ways and Means to move the bill out of committee.

Monnes Anderson's concerns stem from Boeing, the airplane manufacturer that operates in her district. The Oregon plant doesn't emit enough to be covered by the cap, but would be impacted by increases in natural gas prices. An amendment agreed upon Monday would protect companies such as Boeing.

Still, Jillions' coalition, the Partnership for Oregon Communities, has been in discussion with Hass and Roblan to secure their votes against the policy. Jillions said his group might back down from a threat to get the Student Success Act referred to the ballot. Roblan and Hass worked extensively on that legislation, and after it passed Roblan said it was the most important policy in his political career.

Roblan was part of the decision to pull the environmental bill from Ways and Means agenda last week. His district is rural, he said, and he understands the impact the proposal could have on his constituents.

"I want to clearly end up with a bill that people can actually support," he said.

It's been a whiplash and it still continues.

But Dembrow and Power so far appear successful in their efforts to assuage concerns among Democrats without cutting into the bill. Even before Monnes Anderson got her amendment, she was optimistic something would get worked out.

"I think we're going to pass the bill," she said.

Reporter Aubrey Wieber: This email address is being protected from spambots. You need JavaScript enabled to view it. or 503-575-1251. Wieber is a reporter for Salem Reporter who works for the Oregon Capital Bureau, a collaboration of EO Media Group, the Pamplin Media Group, and Salem Reporter.

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